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BUDGET MESSAGE FROM VICE PRESIDENT FOR ADMINISTRATION AND FINANCE

The purpose of this memo is to briefly describe some of the issues that are being considered as part of our fiscal year 2012 budget planning process.

For FY 2012 the governor recommended no changes to K-State’s state general fund operating appropriation. However, we have a number of funding needs that we will have to address. It is helpful to remember that the K-State general use budget, consisting mostly of state funds and tuition, is about $330 million and that this memo is focused on the general use portion of our budget.

For simplicity we have divided the various funding increases that are needed in the general use budget into two groups. The total amount needed is about $13.1 million.

Group 1: Required general use increases ($9.6M)
1. $3.8 million to replace federal stimulus funding currently being used to fund student aid and graduate student salaries.
2. $3.15 million to fund a 15 percent increase in employer group health insurance costs.
3. $1.5 million to fund increased need-based and institutional aid costs (without this investment we risk losing students and tuition.)
4. $0.75 million to fund increased utility costs.
5. $0.3 million to fund university handbook required salary increments.
6. $0.1 million to fund removal of the old chemical landfill.

Group 2: Important and recommended general use increases ($3.5M)
1. $2 million to be used to address merit and retention issues.
2. $1 million to fund graduate research assistant tuition waivers for GRAs supported by general use funds. (Tuition waiver costs for GRAs funded from grants or other sources would be paid from those other sources.)
3. $0.5 million to create a modest reserve.

Current plans to fund our needs are:
1. Include $3.9 million that results from current enrollment levels.
2. Implement $2.6 million in funding reductions agreed to last spring.
3. Continue working with students and faculty to determine an appropriate tuition increase. An increase of 4 to 5 percent would produce a bit over $6 million for all university components.

We cannot commit to funding the Group 2 needs until the legislature has acted and until the student-led tuition strategy group has developed its recommendations. We will provide additional updates as we receive more information.